Stock Market Update

Equity futures are mixed as the market takes in another round of earnings data following yesterday's session that saw the S&P 500 reach new record highs. 

The market benefitted from the announcement of trade deals with Japan and the EU, both of which featured a 15% tariff rate. Trade developments are quieter this morning, with Reuters reporting that trade talks between the U.S. and South Korea have been postponed due to scheduling conflicts.

President Trump signed an executive order to support the American AI industry by promoting the export of full-stack American AI technology packages to allies and partners worldwide. The president also signed an executive order to facilitate the rapid and efficient buildout of data center infrastructure.

Senate Majority Leader John Thune says Congress will need a short-term spending bill to prevent a government shutdown on October 1, according to Politico.

In addition to a hefty batch of earnings reports that includes several mega-cap stocks, the market will also receive the largest batch of economic data for the week today. Jobless claims data releases at 8:30 ET, followed by the preliminary July S&P Global U.S. Manufacturing and Services PMI at 9:45 ET, and new home sales for June at 10:00 ET.

In corporate news:

• American Airlines (AAL 11.93, -0.75, -5.9%) beat EPS expectations by $0.17, reported revenues in-line, and guided Q3 EPS below consensus and FY25 EPS in-line.
• Blackstone (BX 176.10, +4.14, +2.4%) missed EPS expectations by $0.12 and beat on revenues. 
• Google (GOOG 197.95, +6.44, +3.36%) beat EPS expectations by $0.13, revenues increased. The company sees strong demand for its Cloud products and services.
• Honeywell (HON 236.10, -3.17, -1.3%) beat EPS expectations by $0.09, beats on revenues, and guides FY25 EPS and revenues above consensus.
• L3Harris Technologies (LHX 270.00, +0.40, +0.2%) beat EPS expectations by $0.30, beat on revenues, and guides FY25 EPS in-line. 
• Tesla (TSLA 312.92, -19.66, -5.9%) reported EPS in-line, revenues fell 11.8% year-over-year, with deliveries down 13%.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: +1.6%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +0.7%, India's Sensex: -0.7%, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: -0.2%.

In news:

• South Korea is reportedly looking to invest $100 bln in the U.S. as part of a trade deal with the Trump administration.
• Expectations for an October rate hike from the Bank of Japan rose significantly after yesterday's announcement of Japan's trade deal with the U.S. Japan's Manufacturing PMI (48.8) returned into contractionary territory in the flash reading for July.

In economic data:

• Japan's flash July Manufacturing PMI 48.8 (expected 50.2; last 50.1) and flash July Services PMI 53.5 (last 51.7)
• South Korea's Q2 GDP 0.6% qtr/qtr (expected 0.5%; last -0.2%); 0.5% yr/yr (expected 0.4%; last 0.0%)
• India's flash July Manufacturing PMI 59.2 (last 58.4) and flash July Services PMI 59.8 (last 60.4)
• Australia's flash July Manufacturing PMI 51.6 (last 50.6) and flash July Services PMI 53.5 (last 51.7)

Major European indices trade on a mostly higher note with Spain's IBEX (+1.6%) showing relative strength and bank stocks contributing to the outperformance. STOXX Europe 600: +0.3%, Germany's DAX: +0.5%, U.K.'s FTSE 100: +0.9%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: +1.6%.

In news:

• The European Central Bank will release its latest policy statement at 8:15 ET, but a rate cut is not expected at this time.
• Germany's flash July Services PMI (50.1) inched into expansionary territory.
• Deutsche Bank and BNP Paribas reported stronger-than-expected results for Q2.

In economic data:

• Eurozone's flash July Manufacturing PMI 49.8 (expected 49.7; last 49.5) and flash July Services PMI 51.2 (expected 50.6; last 50.5)
• Germany's August GfK Consumer Climate -21.5 (expected -19.4; last -20.3). Flash July Manufacturing PMI 49.2 (expected 49.4; last 49.0) and flash July Services PMI 50.1 (expected 50.0; last 49.7)
• U.K.'s flash July Manufacturing PMI 48.2 (expected 47.9; last 47.7) and flash July Services PMI 51.2 (expected 52.8; last 52.8). July CBI Industrial Trends Orders -30 (expected -27; last -33)
• France's July Business Survey 96, as expected (last 97). Flash July Manufacturing PMI 48.4 (expected 48.5; last 48.1) and flash July Services PMI 49.7, as expected (last 49.6)
• Spain's June PPI 0.8% yr/yr (last 0.0%). Q2 Unemployment Rate 10.3% (expected 10.6%; last 11.4%)